Govt to cut back on retail trade data

Economists, analysts and other financial market players are set to feel the impact of the Rudd razor gang first-hand with data on retail trade to be cut back. A $22 million funding cut has forced the Australian Bureau of Statistics (ABS) to slash the sample size for its monthly retail trade report by two thirds.

The ABS says the changes mean there will be increased volatility in month to month movements in the seasonally adjusted and original data, making it of limited use. The seasonally adjusted figures are preferred by analysts because they provide a better picture about trends in consumer demand and spending.

The ABS will now only print trend estimates of retail sales in its monthly report. CommSec chief equities economist Craig James said the changes were sure to be met with protests. "I think there is going to be an outcry about the fact that here in Australia we'll just have poor estimates of retail spending," Mr James said. "If you don't have a good handle on consumer spending, then you're not going to get
a good handle on growth in the overall economy."

He said it was a near-sighted decision for which blame should be sheeted back to the federal government. "The problem with trend is that it smooths the data so much that it's hard to define turning points, it's hard to define significant changes in direction for consumer spending. This is a retrograde step, it's one that is going to disadvantage the entire economy rather than just sections of it.

"Rather than cutting back the retail sales series, they should be putting dollars into it."